New Open Road Philanthropic Project Takes On Nonprofit Project Derailments

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January 13, 2017; New York Times

A new philanthropic project called the Open Road Alliance has been established to help grantees that hit snags in promised projects. It is intended both to help the grantees complete projects and educate funders about the need to be supportive when such snags appear.

The Haitian nonprofit organization SOIL provides toilets to the poor residents of Port-au-Prince. These toilets don’t just offer residents a measure of dignity and safety; they also lead to the production of fertilizer, fueling employment opportunities and environmental restoration. Working since 2006, the organization, with a budget of $1.3 million, has empowered some of the poorest communities in the world to restore their environment by transforming hazardous pollutants into precious resources.

Providing services in Haiti is fraught with challenges and risks. SOIL is increasing the probability of success by employing staff who speak the local language; putting local suppliers, including local residents, to use in decision-making; creating projects with an earned income stream; and valuing diverse educational experiences. Even with all of these measures, the project was on the edge of failure less than two years ago when the private company running the local landfill lost their contract. Afterward, the area became full of smoke as trash was burned to maintain access. Employees were only able to reach the site once every two weeks, and there was no contingency landfill in the area.

SOIL’s predicament is not unusual. According to two separate reports by the Clinton Global Initiative and the Open Road Alliance, about one in five projects face challenges that could “slow or derail” successful outcomes. The large number of projects facing adversity is due in part to the failure of nonprofits to discuss likely risks with donors and donors’ inability to identify potential complications. According to the Open Road Alliance’s report, 76 percent of donors don’t ask potential grantees about the risks they face, and 87 percent of nonprofits leaders state that grant applications do not ask about potential hurdles.

The Open Road Alliance is a funding initiative providing one-time grants and loans covering “contingency funding that nonprofits frequently encounter” across sectors worldwide. Its report is based on its survey of four hundred grantors and grantees. The findings were centered on a random sample of two hundred organizations designed to determine the frequency, donor response, current policies and procedures, and consequences of unfunded requests on the relationship between funder and recipient.

Surprisingly, the report found major differences between grantor and grantee perceptions:

  • Grantees believe that asking for additional funds negatively affects the likelihood of being awarded future grants, while the vast majority of Funders claim such requests have no effect on future decision-making.
  • Funders incorrectly believe that if they deny a request for contingency funds, Grantees will find an alternate source of funds.
  • Grantees report that when requests for contingency funds are denied, projects are much more likely to be delayed and somewhat more likely to be reduced in scope than Funders believe; Grantees report 16 percent of such projects are terminated, while Funders estimate 10 percent.
  • Funders believe that Grantees are more comfortable talking about these issues with them than Grantees report.

Due to these findings, Open Road Alliance teamed up with the Rockefeller Foundation and Arabella Advisors to assemble two dozen organizations, including the Bill and Melinda Gates Foundation, Goldman Sachs, and the law firm Patterson Belknap Webb & Tyler, to develop a toolkit to identify and assess project risks. The new resource is available to the community and is constructed to encourage donors to use it in whole or in part to better assess project success.

The kit is part of an increased need to apply business fundamentals to grant making and to encourage grant makers to strategically take on more risky projects. To be more strategic, grantors need more information. The kit includes seven items to help facilitate conversations between donors and potential grantees. Equally important, the developers acknowledge the power differential between grantor and grantee.

“Part of the reason we focused on donors is they have the money,” said Dr. Michaels, a clinical psychologist who is married to David Bonderman, a founder of the private equity firm TPG.

“There’s a power differential,” she added. “It’s hard for a nonprofit to come to a funder and say, ‘How are you going to insure us if something gets screwed up?’”

While funders are fond of touting the need for innovation, taking risks and being open about the inevitable complications that surface is still somewhat foreign to many nonprofit/funder conversations. The answer, according to Open Road Alliance, is less about being a helicopter funder and more about simply being available to face reality with resources. This culture change could not come soon enough for SOIL. As the landfill access challenges continued, the organization went back unsuccessfully to its project donor to ask for additional support. The donor suggested Open Road Alliance, who granted SOIL $100,000 for a new composting site.—Gayle Nelson

Original post: https://nonprofitquarterly.org/2017/01/25/new-open-road-philanthropic-project-takes-nonprofit-project-derailments/

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Sexual Assault on Campus, Anonymity, and Title IX

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January 4, 2017; New York Times and National Public Radio

According to a 2007 study by the National Institute of Justice, one in five female college students (and one in 16 male college students) are sexually assaulted and more than 90 percent do not report the crime. One of the reasons students do not report is fear of retaliation, particularly when the accuser is one of their professors. If the student reports the crime to the college’s Title IX office instead of the criminal justice system, they can remain anonymous—but that can often lead to other problems.

Two University of Kentucky entomology graduate students were separately assaulted by one of their professors. They feared retribution and explored opportunities to report the crime while maintaining their anonymity. One of the students explained their decision:

I just spent a good portion of my life in grad school trying to further my career and if I’m labeled as someone who filed a sexual assault claim against a professor, that could very easily backfire against me. There’s a lot of people in academia who think that there are women who make up stuff like this.

They filed a report in the university’s Title IX office. Title IX is a federal law prohibiting gender discrimination on college and university campuses. Schools failing to follow Title IX risk losing federal funding. Once a report is filed, the office is required to investigate. During the investigation, the accused and accuser remain anonymous. Unfortunately, the investigation and subsequent hearings are fraught with challenges.

One obstacle is that each school’s office has jurisdiction only over its students and personnel. If the accused decides to leave the institution before the hearing is completed, the proceedings end immediately without any reference to the investigation on their record, allowing the accused (assuming he or she were guilty of the offense) to potentially assault additional students at the new school.

Another challenge is how the hearing is decided. Who presides over the hearing varies from school to school and usually doesn’t include officials from the criminal justice system. Title IX mandates the hearing utilize the “preponderance of the evidence” burden of proof. This standard is significantly less than “beyond a reasonable doubt,” which is required in a criminal trial. Nonprofit Quarterly has reported on the controversy surrounding 2011 U.S. Department of Education “guidance” on college sexual assault that has been opposed by some in academia, including one specific letter issued by 28 Harvard Law School professors criticizing the lack of due process in college sexual assault invstigations. Participating in a hearing is often extremely difficult for a survivor of assault because of the stresses that come with proving the activity occurred. By using the lower standard of proof, the hearing puts a limit on any additional pain, trauma, and expense.

In the case of the two University of Kentucky students, the Title IX office scheduled an official hearing after interviewing dozens of people and collecting evidence. But the hearing never occurred because the professor resigned before it could begin. Frustrated, the women reported the assaults to the university’s student newspaper. The media attention led to many additional stories and FOIA requests for the full Title IX report. The students feared their anonymity would be compromised and joined an action by the university to stop the report release. Judge Thomas Clark of the Fayette County Circuit Court plans to issue a ruling in the next two weeks.

Schools that fail to conduct proper hearings can be subject to government complaints and lawsuits. Currently, over 200 institutions are under federal investigation due to complaints connected to sexual violence investigations and proceedings. A better solution might be a society that better supports survivors of sexual assault.—Gayle Nelson

Update: On Tuesday, 1/24/2017 The Judge ruled in favor of the University to prohibit the release of the report to protect the anonymity of the students. The Newspaper states it will appeal the decision.  http://www.npr.org/2017/01/25/511554841/judge-sides-with-university-in-legal-fight-with-student-newspaper

Original post: https://nonprofitquarterly.org/2017/01/12/sexual-assault-campus-anonymity-title-ix/

Fighting Domestic Violence, One Haircut at a Time

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January 1, 2017; New York Times and NPR, “The Two-Way”

According to a CDC study from 2003, domestic violence is the cause of two million injuries in the U.S. every year. Beginning this year, the state of Illinois has a new law educating hair stylists, nail technicians, and aestheticians on ways to help customers who are victims of domestic violence.

Joan Rowan is a hair stylist and owner of two hair salons in the Chicagoland area. In her forty-one-year career, she has had multiple conversations with clients who were experiencing domestic abuse: “Sometimes they tell you so much they never come back again, because they’re afraid, or they’re embarrassed, they don’t know what to do.” Rowan has provided training to her stylists to help them support their clients, but she has wished there were more she could do.

For a long time, public health campaigns among others have recognized the value of hair salons and barber shops as centers for community education and organizing, so the concept of making use of these venues is not new. But the state of Illinois is now building on these relationships with a new law that went into effect January 1st. Advocated for by the nonprofit Chicago Says No More, the law is the first of its kind to reach out and provide a one-hour training to hair stylists and nail technicians every two years as part of their license renewal. Over the next two years, it’s estimated about 88,000 stylists will participate in the program.

Chicago Says No More created the “Listen. Support. Connect.” program with the help of Cosmetologists Chicago. The program educates stylists on how to identify signs of abuse and assault and provide resources. Stylists are required to participate in the program but do not have to report the violence and are protected from any liability.

Although the number of independent neighborhood hair salons has been decreasing over the last forty years, hair stylists and their salons continue to have a special relationship with their clients and community. Often, they serve clients for many years and sometimes multiple generations of the same family. The relationship is something Illinois State Senator Bill Cunningham, one of the legislators responsible for introducing the law, knows personally: His wife was a hairstylist in her early twenties.

The program was built upon the Professional Beauty Association’s Cut It Out Campaign. The national campaign provides resources “mobilizing salon professionals and others to fight the epidemic of domestic abuse in communities across the U.S.” It was created in 2003 after a similar statewide program was developed by the Women’s Fund of Greater Birmingham and the Alabama Coalition Against Domestic Violence.

There’s an unspoken downside, however: Although the new Illinois law provides resources to women experiencing abuse, since the state is again without a budget, many of the organizations these women will look to for help are not receiving state funding and may not have the staff or programs to help.—Gayle Nelson

 

Original cite: https://nonprofitquarterly.org/2017/01/04/fighting-domestic-violence-one-haircut-time/

What Does It Take to Grow a Nonprofit? Teamwork and Capital

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November 16, 2016; Stanford Social Innovation Review

Although not always an indicator of impact and sustainability, nonprofit growth is a constant focus of philanthropic leadership. A recent study of over 200 organizations found three common attributes among nonprofits that were able to efficiently make the leap from idea to $2 million budget: strong teamwork, effective outcome evaluation system, and access to capital.

The field-based study began in September of 2016 by Kathleen Kelly Janus, a lecturer at the Stanford Program on Social Entrepreneurship. The study’s team examined more than 200 organizations, distributed among those with budgets under $500,000, between $500,000 and $2 million, and over $2 million. The organizations’ missions were diverse; leaders were asked to describe their work by choosing from multiple categories (and could choose more than one). The top three were education, with 48 percent surveyed; 26 percent with youth-based focus; and 23 percent community development missions. (Thirty-one percent chose “other” as one of their tags.) On average, organizations reached the $500,000 milestone in ten months but needed an average of 16 months to double their budgets to $1 million. On average, organizational growth from $1 to $2 million took a similar trajectory.

Since many articles focus on the personality of an organization’s leader as a key element of organization growth, the study began by examining the CEO/Executive Director. It found a wide range of actual job descriptions, but a key responsibility for organizations of all sizes is fund development. Interestingly, as organizations grow, the amount of time leaders spend in fundraising tasks increased from an average of 26 percent for organizations under $500,000 to 30 percent with budgets over $2 million. Study authors also noted a shift from CEO focus on program development for organizations under $500,000 to people management for organizations over $2 million.

Instead, the first characteristic of organizations achieving substantial growth was having a strong team of leaders to support the CEO/Executive Director. An effective team allowed the CEO to focus on capital instead of program. Connected to creating the team was the talent to avoid “bad hires” and purge them quickly when mistakes are made. Often, a strong team was not only made up of staff but key board members. Overall, the study found that “the lack of a high-functioning team can pose significant risks” to organization growth.

The second essential element was a focus on outcome evaluation. The study found that organizations with robust outcome tracking systems could decrease the time to reach the $2 million mark by as much as five months. The study also made a connection between effective evaluation structure and the ability to obtain a large catalyzing grant quickly.

The final element, access to capital, was often linked to the other two elements. Organizations with board members with connections to foundations or individual wealth were able to use their access to facilitate growth. Additionally, organizations with effective evaluation programs were able to discuss their clear program outcomes with funders, leading to more attention by larger foundations donating significant catalyzing grants.

Antony Bugg-Levine from the Nonprofit Finance Fund described in 2012 a key difference in the distinct types of capital essential for organizational growth:

Pay attention to the difference between “buy” money that pays for services and “build” money that enables an organization to invest in its long-term sustainability. As with any business, organizations need to balance both, and this balance shifts as they scale. Funders need to know whether their grantees need build money or buy money and how to be effective buyers and builders.

Overall, organizations of all sizes struggled to raise essential funds and it remains the number one challenge of growth. This is true even for organizations with “a fair degree of earned income,” as the report claims.

At the end of the study, authors identified three opportunities for funders to help organizations scale: fund leadership coaching, aid in building evaluation programs, and refer grantees to other funders in your network.—Gayle Nelson

 

Original cite:  https://nonprofitquarterly.org/2016/11/29/take-grow-nonprofit-teamwork-capital/

18 Months of Budget Impasse in Illinois Stresses Nonprofits and Devastates Lives

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November 29, 2016; Chicago

Throughout the 2016 fiscal year, Illinois government leaders failed to pass a state budget. Without a budget, many nonprofits did not receive any state funding even though they had valid contracts and performed the promised services. One day before the 2017 fiscal year began, state leaders passed a six-month stopgap budget to fund services for the first half of 2017. That budget will end on December 31, 2016.

Last week, the legislative session ended without state leaders passing a budget, leaving many Illinois nonprofit leaders holding their breath on their organizations’ ability to provide essential services after January 1st.

Over the last eighteen months, the Nonprofit Quarterly wrote extensively on the state of Illinois’s lack of a budget and its devastating effects on some nonprofits. During this time, nonprofits providing programs mandated by the state constitution were paid but those providing non-mandated services were not. These nonprofits had valid contracts with the state to provide these essential services, and most struggled to provide the services as required under the contract.

The governor, Bruce Rauner, and his staff promised to pay the providers after the impasse was resolved. But once the stopgap budget passed, the governor used a clause in the contract to limit reimbursements. Additionally, since the state did not have the revenue to make the payments, the disbursements were further delayed. Nonprofit leaders, including Diane Rauner, the governor’s wife, who leads a large Illinois nonprofit organization, sued the state. They lost in county court and the suit is now on appeal.

The failure of the state to pay for “nonessential” services caused great hardship for citizens throughout the state. For example, college students did not receive their MAP grants, K-8 schools did not receive educational funding, and people scheduled to leave prison were forced to stay locked up because halfway houses could not pay the staff that would support their reentry. At the same time, 62 percent of Illinois residents reported the budget impasse did not affect them.

In These Times and Kartemquin Films are creating an eight-part documentary, Stranded by the State, on the effects of the 2016 budget impasse on residents and the nonprofit institutions that serve them.

In These Times is a Chicago-based independent nonprofit magazine dedicated to advancing democracy and economic justice. The first program was released two weeks ago, highlighting the effects on Illinois’s higher education system and the tens of thousands of students served.

The limited late payments and decreased tax revenue continue to devastate an already damaged safety net and the State as a whole. As of November 16th, Illinois owed $10.6 billion in outstanding bills and possess a deficit of over $5 billion. Last month, North Side Housing and Support Services announced it would close a 72-bed shelter on the North Side of Chicago by the end of the year.

Currently, state leaders are meeting behind closed doors to try and reach agreement. Although Democrats lost a small number of state house representatives and senate leaders, they continue to hold majorities in both legislative houses. The Republican Governor continues to demand nonbudgetary items, including term limits on legislative leaders, before he will agree to a budget; Democrats in the legislature refuse to discuss these items. The Democrats won the State Comptroller’s office during the November election, but it is unclear if and how this will affect the impasse.

To create a balanced budget and begin to pay down the debt without instituting major long-term budget cuts, the state needs about $7 billion dollars in additional revenue annually. In the meantime, nonprofit leaders must recover from the presidential election and advocate for a solution before they and the residents they serve are stuck in another devastating situation.—Gayle Nelson

Original cite: https://nonprofitquarterly.org/2016/12/05/18-months-budget-impasse-illinois-stresses-nonprofits-devastates-lives/